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What the price that is acceptable for the special order

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Reference no: EM132709862

Peter Senen Company is a manufacturer of electronic switches. One of their products, " Petesy Switch" is used as a component of most electrical appliances.

Petesy Switch has the following financial data per unit.

Selling price P180

Variable costs:

Materials P 24

Labor 18

Factory Overhead 15

Shipping and handling 3 P60

Fixed costs:

Factory overhead P 36

Selling and admin 14 50

Total P110

During the month, Peter Senen Company received a special, one time order for 1,500 units of Petesy Switch.

Problem 1: Assuming that the company has an excess capacity that is enough to produce this special order without affecting sales to regular customers, and the company wants to improve its profitability, the price that is acceptable for this special order is in excess of

a. P180

b. P110

c. P60

d. P50

Reference no: EM132709862

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